Correlation Between Hanesbrands and IShares China
Can any of the company-specific risk be diversified away by investing in both Hanesbrands and IShares China at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Hanesbrands and IShares China into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanesbrands and iShares China CNY, you can compare the effects of market volatilities on Hanesbrands and IShares China and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Hanesbrands with a short position of IShares China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanesbrands and IShares China.
Diversification Opportunities for Hanesbrands and IShares China
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hanesbrands and IShares is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Hanesbrands and iShares China CNY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares China CNY and Hanesbrands is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Hanesbrands are associated (or correlated) with IShares China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares China CNY has no effect on the direction of Hanesbrands i.e., Hanesbrands and IShares China go up and down completely randomly.
Pair Corralation between Hanesbrands and IShares China
Considering the 90-day investment horizon Hanesbrands is expected to generate 13.27 times more return on investment than IShares China. However, Hanesbrands is 13.27 times more volatile than iShares China CNY. It trades about 0.24 of its potential returns per unit of risk. iShares China CNY is currently generating about -0.19 per unit of risk. If you would invest 712.00 in Hanesbrands on September 3, 2024 and sell it today you would earn a total of 158.00 from holding Hanesbrands or generate 22.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Hanesbrands vs. iShares China CNY
Performance |
| Timeline |
| Hanesbrands |
| iShares China CNY |
Hanesbrands and IShares China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanesbrands and IShares China
The main advantage of trading using opposite Hanesbrands and IShares China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanesbrands position performs unexpectedly, IShares China can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in IShares China will offset losses from the drop in IShares China's long position.| Hanesbrands vs. Ralph Lauren Corp | Hanesbrands vs. Levi Strauss Co | Hanesbrands vs. Under Armour C | Hanesbrands vs. PVH Corp |
| IShares China vs. Vanguard FTSE Developed | IShares China vs. HSBC MSCI Japan | IShares China vs. iShares II Public | IShares China vs. Hydratec Industries NV |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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